Zimmer Biomet Holdings ((ZBH)) has held its Q4 earnings call. Read on for the main highlights of the call.
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During the latest earnings call, Zimmer Biomet Holdings presented a balanced outlook, showcasing consistent revenue growth and strategic acquisitions while addressing challenges such as ERP issues and foreign exchange headwinds. The company highlighted its strong performance in the S.E.T. segment, reflecting its successful diversification strategy.
Consistent Revenue Growth
Zimmer Biomet reported nearly 5% constant currency sales growth for the fourth quarter of 2024, marking the 12th consecutive quarter of achieving mid-single-digit or better growth. This consistent performance underscores the company’s ability to maintain its growth trajectory in a competitive market.
Strategic Acquisition of Paragon 28
In a strategic move to enhance its product offerings, Zimmer Biomet announced the acquisition of Paragon 28, a leader in the $5 billion foot and ankle space. Expected to close in the first half of 2025, this acquisition is anticipated to strengthen Zimmer Biomet’s position in the lower extremity market.
Positive Pricing Trends
The company achieved positive pricing for the fourth consecutive quarter, with a 60 basis points improvement. This trend indicates Zimmer Biomet’s strong pricing power and ability to navigate the competitive landscape effectively.
Operational Excellence Initiatives
Zimmer Biomet has implemented new leadership in key areas and announced plans to launch over 50 new products over the next 36 months. These initiatives focus on innovation and diversification, ensuring the company remains at the forefront of the medical technology industry.
Strong Performance in S.E.T. Segment
The S.E.T. segment experienced robust growth of 8.4% globally, outpacing the growth in knees and hips. This performance highlights the company’s successful diversification strategy and its ability to capitalize on emerging market opportunities.
ERP Implementation Challenges
Despite facing ERP implementation issues in 2024, which affected the fourth-quarter performance, Zimmer Biomet exited the year at pre-ERP shipping levels. The company remains focused on overcoming these operational challenges.
Foreign Exchange Headwinds
Looking forward, Zimmer Biomet anticipates 150 to 200 basis points of headwind from currency fluctuations in 2025. These foreign exchange challenges are expected to significantly impact earnings per share growth projections.
Higher Non-Operating Expenses
The company reported higher non-operating expenses, including increased interest expenses due to higher debt and interest rates. These expenses are a focal point for Zimmer Biomet as it navigates the current economic environment.
Guidance for 2025
Zimmer Biomet provided guidance for full-year constant currency revenue growth of 3% to 5% in 2025, with adjusted earnings per share expected to range from $8.15 to $8.35. The company’s strategic priorities for 2025 include advancing people and culture, operational excellence, and innovation and diversification. The acquisition of Paragon 28 is also anticipated to enhance growth opportunities in the ASC market.
In summary, Zimmer Biomet’s earnings call conveyed a balanced perspective, emphasizing consistent growth and strategic initiatives amidst operational and economic challenges. The company’s forward-looking guidance underscores its commitment to sustaining revenue and earnings growth, positioning itself strategically for continued success in the medical technology sector.
